The crux of cryptocurrencies is proof-of-work. What you'd need is some way to require the proof-of-work to lead back to something socially useful.

I do not think this problem is solvable even in principle.

I was thinking more like the algorithms could compete, and the more competition, time and computing power used to find a solution, the more the winner would earn.

So, for example:

if 100 algorithms using 1ghz each compete for 1 hour before finding the optimal solution, the winner would earn 100*1*1=100 * whatever the value is.if 200 algorithms using 2ghz each compete for 2 hours before finding the optimal solution, the winner would earn 200*2*2=800 * whatever the value is.

Also, there could always be a "police algorithm" involved in the competition for all problems, and if the "police" algorithm finds a solution significantly faster than the first winner, it is dismissed.

I am sure you can find many weaknesses with this, but I defiantly don't see why something like this should be impossible to make in principle.

Also, I don't think it should be a necessity that the problem must be something socially useful. Just that it should be open for people to propose socially useful problems. If there aren't enough socially useful problems, they can compete for artificially generated problems.

I also think it would be more or less impossible to prove that something is a socially useful problem, and therefore it cannot be a requirement.

I have made this graph to show why cryptocurrencies are better than national currencies, or why mining is better than central banks.

And I have also added this text, due to the feedback I got from Death 999:

Quote

However, since it is difﬁcult to prove that a problem is a socially signiﬁcant, it cannot be a requirement. It should rather be open for everybody to propose problems. And since there might not be enough proposed problems, there should also be artiﬁcially generated problems.

I really haven't though much of this before, but the cryptocurrencies are probably the most devastating force for national currencies (and even nation states themselves). It has become quite obvious to me now, that the national currencies are going to lose the battle against the cryptocurrencies. Probably more than half of the world economy is going to be in cryptocurrencies around 2030, and after that, people are going to run away from national currencies.

I wonder if nations can find a way to survive the loss of their currencies... It will certainly be a blow to the very foundation of modern nation states.

EDIT: I might need to add about this to my "HOW YOU CAN HELP TO CHANGE THE WORLD INTO SOMETHING BETTER" article. Investing into cryptocurrencies seems to be one of the most efficient ways to change the world.

Central banks fulfill genuinely useful functions - money supply is a very powerful lever, and putting nothing-in-particular in control of it leads to bad outcomes.

Well, even if they once performed genuinely useful functions, they are a dying system. Let me explain:

Investors decide what to invest in mostly based upon two factors: security and growth.

In order for central banks to compete with cryptocurrencies regarding growth, they would need to have a negative rent, and a quite significantly negative rent. That wouldn't work very well, since that would give an incentive to banks and consumers to get as much loans as possible. Mining is inherently a better system than loans, since mining requires work. It is much better to control the value of a currency with difficulty of work, than with interest rate on loans.

The only reason why investors have been a bit reluctant to invest in cryptocurrencies, is because of security. They have considered the national currencies to be more secure. This however changes, as the market capitalization of cryptocurrencies increases compared to national currencies. The bigger the market capitalization of cryptocurrencies, the more secure they will be considered.

No matter if you like cryptocurrencies or not, they are going to take over the world economy during the next 10-15 years. We might have a chance of making them less anonymous if we work together. The greatest treat I see with cryptocurrencies, is that some of them are very well suited for tax evasion and illegal activities, since they are so anonymous.

Anyway, I dislike the current cryptocurrencies because right now the most of them do the mining for the transaction verification, and this verifiacation is WAY slower than traditional methods. also it doesn't work when we establish ourselves as a spacefaring race. instead of giving cash money you would be giving bitcoins with weeks of verification time between mars and earth, which is fucked up.Also, liking crypocurrencies doensn't rhyme with my desire for a better environment. This mining bullshit that is neccesary is consuming so much energy which all goes to waste for nothing. For a single transaction you're consuming an american households useage of energy for 3 days. It is unmaintainable if the entire world starts using bitcoin.

Based upon the current exponential growth rate of cryptocurrencies, I made this graph to estimate when it will surpass the world economy. Of course, people will start to run away from national currencies long before that. And when people start to run away from the national currencies there will be hyper-inflation.

Imagine the old national currencies as swords, and the new cryptocurrencies as guns. Populations using swords had no chance against populations using guns, nor will the old currencies have any chance against the new cryptcurrencies. They are doomed.

I have a feeling that something in your model is going to fail before that happens.

There is always uncertainty involved when projecting into the future. However, the cryptocurrencies seem to be very resilient, since there are so many different cryptocurrencies now. EU might be able to make some laws against them, but I doubt they will be able to do that in time. It takes way too much time to make changes in democratic countries, and they will probably just outlaw bitcoins if anything. But even if they somehow manage to outlaw them in time, they will continue to grow in the black market. And lots of countries in the world are not going to outlaw them, so there they can flourish. I doubt Donald Trump will outlaw them. He will probably rather invest in them.

I am going to write about this in the concluding remarks of my blueprint article.

I think one of the reasons why you are skeptical, might be related to that exponential growth curves almost always just last for a short while. Everybody knows that a bacteria culture under normal circumstances doesn't grow to the size of Earth in 48 hours, even if that is what we might expect from their exponential growth curve.

Bacteria cultures will only grow exponentially when they have enough sustenance. Since they almost always are limited by the amount of sustenance in their environments, they will usually never grow to such proportions.

In order to understand when the exponential growth phase for cryptocurrencies will end, it is important to understand what their sustenance is. It seems like they actually are feeding on the old national currencies. This is why I think my model wiill not necessarily fail.

you forget that in the future cryptocurrency might become the national currency of a country.

Sure, but it is going to compete against all the other cryptocurrencies, and if you are going to have taxes on your national currency, people are likely to prefer more anonymous cryptocurrencies to evade taxes.

you forget that in the future cryptocurrency might become the national currency of a country.

Sure, but it is going to compete against all the other cryptocurrencies, and if you are going to have taxes on your national currency, people are likely to prefer more anonymous cryptocurrencies to evade taxes.

and where will they pay with these currencies? I doubt that you can get your daily supermarket needs with tax-evasion currencies.